Social media endorsement is seen by brand owners as a powerful marketing tool in 2025 and there are no signs of its use slowing down. The rapid increase in marketing on platforms such as TikTok (including TikTok shop), Instagram, Facebook, Pinterest and YouTube, to name but a few, has resulted in the Competition and Markets Authority (“CMA”) playing regulatory catch-up.

The Advertising Standards Authority (“ASA”), using its AI-based ad monitoring system, found in May 2025 that 43% of all advertorial content involving influencers failed to meet compliance standards, with the fashion and travel sectors behaving particularly poorly.

However, the Digital Markets, Competition and Consumers Act 2024, that came into force in April 2025, grants tougher powers to the CMA and consequently influencers, agencies and brand owners will need to take their legal obligations more seriously.

The Digital Markets, Competition and Consumers Act 2024 (“DMCC Act”)

The aim of the DMCC Act was to give consumers greater protection from unfair trading practices, enhance competition in digital markets, and strengthen the CMA’s enforcement powers.

Some of the changes made by the DMCC Act include:

Controls on Fake and Misleading Reviews

The DMCC Act introduces new provisions to control fake and misleading reviews. It imposes an obligation on brand owners to ensure reviews are genuine and the labelling of incentivised reviews will now be mandatory. Reviews should also represent a consumer’s genuine experience. Both the influencer and the brand owner could potentially be liable for breaches of the DMCC Act.

Influencers will need to bear in mind:

  • The DMCC Act prohibits “concealed incentivised reviews”. If, for example, reviews are incentivised by means of payment, gifts, discounts, freebies, or even by promoting a business connected with the influencer (e.g. a business owned by a friend or family member) then this must be made clear (e.g. by stating “#Ad”).
  • Whoever publishes a review has additional obligations to ensure that they do so in a way that is not misleading.
  • The DMCC Act prohibits “fake reviews.” A review must reflect the influencer’s genuine experience of the product. The practice adopted by some influencers of only providing positive reviews (especially if they have a long-standing relationship with a brand owner) is likely to be heavily scrutinised in future.

Brand owners and agencies will need to bear in mind:

  • They may need to be more vigilant when selecting influencers for commercial relationships.
  • Brand owners and agencies will need to have a clear understanding of which of them will be monitoring the influencers’ content and how any non-compliance will be managed.
  • Commercial agreements with influencers should oblige the influencers to comply with the DMCC Act, ideally setting out the key provisions for them in plain English, and grant the brand owners and agencies creative control and termination rights where these are not followed.
  • Commercial agreements with influencers should be free of any provisions that might suggest positive fake reviews are expected or will be tolerated.

Streamlined Investigations

The DMCC Act grants powers to the CMA to investigate suspected infringements, or practices they believe may harm the wider interests of consumers, directly and without going to court. These powers include the ability to issue enforcement notices.

Fines

Companies in breach of the applicable laws and regulations can face significant fines. The most serious breaches can attract a fine of the greater of £300,000 or 10% of annual global turnover. Even the most minor breaches can attract a fine of the greater of £30,000 or 1% of annual global turnover. Daily penalties may also be imposed for procedural failures that are left unaddressed.

Conclusion

The DMCC Act will make it easier for the CMA to regulate the influencer marketing industry. At present, the DMCC Act is currently within its “compliance” period (during which the CMA is focused on supporting compliance rather than proactive enforcement), but this will end on 6 July 2025.

Whether you are an influencer, agency or a brand owner, now is the time to develop policies and procedures that will minimise the risk of non-compliance. The experts in our Commercial and Dispute Resolution teams can help you to find pragmatic solutions that will deliver legal compliance without stifling dynamic and innovative marketing ideas.